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Employee retention

It was a rare opportunity to undertake a project in BAJAJ
6 ...
 Primaryobjective-
 To help in retaining the employees with knowing the
causes of attrition.
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Employee retention

  1. 1. 1 ACKNOWLEDGEMENT: It was a rare opportunity to undertake a project in BAJAJ ALLIANZ LIFE INSURANCE COMPANY Ltd. a organization that is well known for its values and practices in Insurance sector that it imbibes into all individuals who, no matter, even for a short duration, enter the premises of this organization. I am thankful to Mr. ARJUN SINGH YADAV ( Human Resource UP-2), whose thorough guidance and direction, has helped me accomplish this project with maximum understanding and education. I am grateful to our Head of Department Prof, I.L.SINGH and project guide Dr. SANDEEP KUMAR to provide their valuableinputs throughout this study. I am thankful to all myProfessors for their significant support and guidance. I would like to express my gratitude towards all employees of BALIC who have given their earnest support, directly or indirectly for this project. TANUSHREE HELA M.P.M.I.R. B.H.U. VARANASI.
  3. 3. 3 OBJECTIVE OF THE PROJECT  Primaryobjective-  To help in retaining the employees with knowing the causes of attrition.  To analyze and identify factors that help retention.  Secondary objectives-  To ascertain effectiveness of retention measures taken by BALIC .  To explore employees perceptions of the overall organization .  To identify current areas of concern and opportunities for improvement.
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  5. 5. 5 EXECUTIVE SUMMARY The corporate world today is focused on concepts about leadership, retention, management, attracting the right person for right job and other various aspects of the people side of business. Modern organizations are operating in an unprecedented, highly competitive and turbulent business environment which is characterized by the globalization of business. Further, today’s global workforce is more mobile than ever before .Focus of BALIC is on retaining and developing a company is most valuable asset i.e.; people. Management of an organization is human capital starts prior to hiring an individual. It starts with hiring individuals that possess the characteristics need for the job, the motivators satisfied by the job and culture of the company and the drive to contribute to the overall success of the company. It offers assessment to determine the behavioral characteristics and attitudes that naturally fit with a position. Due to very high rate of attrition organization is thus working very hard to know the causes of attrition , so that by having effective management in that area we can help in retaining employees for BALIC. The HRD of this organization seems very effective.
  6. 6. 6 They are trying to undertake numerous measures for employee retention and control employee turnover. Hence, the main objective, to initiate this project was to retain employees by knowing the causes of attrition and also to help organization to reduce attrition rate.
  9. 9. 9 INTRODUCTION TO RETENTION CONCEPT  RetentionMeaning a. The act of retaining. b. The condition of being retained. c. Capacity or power of retaining.  ImportanceofRetention: Retention is important for the following reasons:  Replacing qualified employees can be extremely difficult, exceptionally expensive, and very often unnecessary.  Training new employees is costly.  Poor retention creates a "revolving door" culture within the organization, lowering morale and confidence  Poor retention affects your customers (no matter the type of business you have, your customers develop important relationships with their contacts within your organization).  High turnover eats away at your organization's productivity, ability to deliver, and overall efficiency. This sad reality always manages to impact your customers negatively in one way or another.  Causesforhighemployeeturnover:  When there are so many benefits associated with organization .  when there are so many privileges for the employees than what makes them to change the company/industry?
  10. 10. 10  Is it only MONEY that matters or anything else as well?  No growth opportunity/lack of promotion  For higher Salary  For Higher education  Misguidance by the company  Policies and procedures are not conducive  No work life balance  Physical strains  Uneasy relationship with peers or managers  Uneasy flow of communication.  RetentionStrategy: Turnover of key employees is another big HR risk that companies face today. The increasing knowledge intensive nature of many businesses creates serious problems when talented employees leave. So, companies must do what is necessary to retain their best managers. Attracting and retaining talent is not just a matter of higher 'salaries and more perks. It involves shaping the whole organization, its vision, values, strategy, leadership, rewards and recognition. Thus, companies must look at retention as an exercise that ensures long-term employee commitment rather than as a knee jerk response to hold back employees after they resign. An effective retention strategy must be built around the following:  Taking note of the company's culture, designing, and building the ideal culture.
  11. 11. 11  Assessing potential candidates for hiring, following careful hiring practice.  Measuring and understanding the issues driving retention  Putting in place well designed career-development plans  Designing an attractive and transparent reward system.  Building the right culture is an important step in improving employee loyalty  It involves understanding the existing values, clarifying business goals' and strategy, defining the desired culture and introducing change management initiatives, wherever necessary to correct the state of affairs.  Fostering the ideal work culture involves various steps:  Hiring people with leadership potential rather than just managerial potential.  Articulating a strong corporate purpose that makes people believe that they are making a positive impact on society.  Treating people with dignity and respect.  Interacting regularly with employees talking to them to understand the problems they are facing and giving them the additional resources they may need to discharge their responsibilities efficiently.  Attempting to influence rather than control employees. Modern organizations are operating in an unprecedented, highly competitive and turbulent business environment which is characterized by the globalization of business.
  12. 12. 12 Further, today s global workforce is more mobile than ever before. Modern organizations are becoming increasingly aware that a critical source of competitive advantage often comes not from having the most ingenious product design or service, the best marketing strategy, state of the art technology, or the most savvy financial management but from appropriate systems for attracting and retaining human resources. Retention starts at the top. Seeking, getting, and keeping qualified, a motivated employee is the responsibility of the governing board and its hired director/administrator. Getting and keeping good staff demands focused that make retention a prime management outcome. Managers need to appreciate staff every day and constantly work to keep them onboard. Employee Retention Strategy is based upon two primary beliefs:  It is difficult for employers to retain good employees if they don't have a process to hire the right people in the first place.  (2) Retention processes must directly support the reasons that successful, satisfied employees stay. Retaining good staff begins in the recruitment/ hiring phase. Spending the energy to find/hire the best candidate will benefit organization and the new employee over the long term. Recruit and hire new employees who fit the job, organization, and the existing staff. Much like building an athletic team, recruit players (staff) who best fit the play book (organization s mission/values). Hire for a good fit and attitude. Attitude and motivation are not easily changed; job skills can be learned
  13. 13. 13 later, during training. More people lose or leave jobs because they did not fit the workplace culture than from lack of work skills. Once ideal candidates are hired, their orientation and training are paramount. Orientation is the critical fitting in phase. New hires are oriented to the workplace culture, are trained in the tasks, and learn the agency s expected outcomes. Nurturing staff is a ongoing, a day-to-day activity. Clear and open communication is the best foundation for nurturing staff. Nothing says respect or models empowerment more than managers who actively listen to their employees. The active listener appreciates the employee s feelings, input, and concerns. Listening is the most cost- effective way to acknowledge people. Being heard builds self-esteem and employees with high self-esteem feel trusted and valued and are less likely to feel marginalized. Rewards and recognition can be powerful tools. More and more agencies use informal methods of rewarding staff. Compensation and other financial benefits are becoming less the norm for recognizing employee accomplishments. Reward systems that are person based are proving to be effective, when recognition is linked to personal desires or needs such as time off, job sharing, flex-time, office space, special tasks, public acknowledgment, news releases, etc. The most important part of any informal reward/recognition system is that it is linked to organizational values and that it is personally given from management. An organization should foster retention incentive to a current employee if it determines that the unusually high or unique qualifications of the employee or a special need of the agency for the employee's services makes it essential to retain the employee and that the
  14. 14. 14 employee would be likely to leave in the absence of a retention incentive. Retention practices assist employers in retaining quality employees in the workplace. They are also designed to provide existing employees with necessary employability skills to enhance their effectiveness and have also been effective for Workforce Development teams. In addition, Human Resource professionals in understanding the specifications of positions within the workplace. Support staff is crucial to the overall success of an equine practice. Once quality employees have been identified and have become an integral part of the practice, the challenge to the practice owner is employee retention. Many factors come into play, and a balance must be struck between what is necessary to keep employees happy and what the practice can realistically provide. The most-important and obvious aspect of employee retention is compensation. A well designed incentive program will attract the right people and keep them and can impact on delivering planned business results as well as reinforcing desired employee behaviors. Making up the difference If the employee has realistic expectations as to what the practice can pay, then problems in the future hopefully will be avoided. The practice might be able to make up the difference by providing other benefits both tangible and intangible. Providing health insurance will be highly valued by most employees. Giving bonuses when the practice is able, allowing flexible time off and starting some sort of retirement fund for all employees can help make up the difference for a lower wage scale. Letting employees know that they will be paid overtime during the busy season will be an incentive for the longer hours worked, too. Having a
  15. 15. 15 friendly, supportive workplace where employees want to come to work is probably one of the most important aspects of employee retention. This can be accomplished by treating employees as equals. In today's market economy, employment situations change constantly, and the person who works his or her entire career for the same business is less and less common. If employees are staying with the practice from two to five years, then the employer probably has done what is realistic and necessary to retain employees. There always will be those situations where employees leave after being with the practice for just a short time.  RetentionTechnique: Companies now adopt more than one technique to create an internal environment that will retain their employees. The most common of them being:  IncreasingTheOrganisation'sLevelOf Professionalism: Employees leave companies where intra- organisational interactions are unstructured, and decisions, ad-hoc and driven more by personal prejudice rather than professional consideration. By adopting systems that introduce an element of objectivity into its internal operations, a company can create a better workplace.  Moving FromFamily ToProfessionalManagement. In most family-managed organizations, professional managers leave because they cannot see themselves holding key positions, or functioning with the level of independence that their
  16. 16. 16 designations merit. By inducting professionals into senior management positions, a company can lower its attrition-rate.  Making PerformanceAppraisalsObjective. Employees like to know how, when, and by whom their performance is going to be measured. An appraisal process that lists objective and measurable criteria for performance appraisal removes the uncertainty in the minds of employees that their superiors can rate their performance any which way they please.  InvolvingEmployeesInTheDecision-MakingProcess. People like to work in organisations where their opinions count. The higher an employee's involvement in decision-making, the higher is the organization retention-level. A participative decision- making process is good; total empowerment, better.  EnsuringAMatchBetween AuthorityAndAccountability. Most companies fall into the trap of holding an employee accountable for a specific activity without empowering her with the authority to perform it well. Often, the situation is exacerbated by the fact that they vest another employee with the same authority, but do not hold him accountable!  MeasuringEmployeeSatisfaction. Obsessed with catering to the demands of their external customers, companies ignore their internal customers. Periodic employee satisfaction surveys can highlight the potential flash points, and enable the company to take corrective action.
  17. 17. 17  AchievingA MatchBetween IndividualAndOrganisational Goals. Many companies fall into the trap of expecting their employees to subsume their individual objectives before the organisational one. This forces employees to leave. The best companies achieve a balance between the two.  DesigningA CompetitiveCompensationPackage. Money isn't a motivator, but it is an effective de- motivator. While organisations that pay best-in-industry salaries may find themselves unable to use that fact to motivate their employees, those that do not could find their best employees leaving.  IncreasingOrganisationalTransparency. People do not like to work in black-box like organisations, where information is rationed out on a need-to-know basis. They prefer a transparent organisation that is willing to share every aspect of its functioning with its employees.  PromotingEmployeesFromWithin. A company that constantly fills vacancies by hiring from outside is certain to face retention problems. Employees who realise that they are unlikely to be promoted to fill the vacancies will leave the organisation. Growing your own is a sound retention strategy.  HelpingEmployeesAcquireNew Skills. As the job-profiles and desired skills-sets for a particular job change, companies may feel the need to hire employees with new skills, or
  18. 18. 18 retrain their existing employees. Companies that choose to do the latter will find it easier to retain their people since the training signals that the organisation values their contribution, and is willing to invest in upgrading their skill.  FocusingOn WelfareMeasures. Employees are not just warm bodies; they are individuals with families and lives of their own outside the workplace. Organisations that recognise this, and help employees achieve a better balance between life and works are likely to face fewer problems than those that do not.
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  21. 21. 21 RESEARCH METHODOLOGY Research Methodology is a systematic method of discovering new facts or verifying old facts, their sequence, inter- relationship, casual explanation and the natural laws which governs them. Research Methodology explained by Redman and Mory are as follows systematized effort to gain new knowledge Research Methodology is original contribution to the existing stock of knowledge making for it advancement. It is the purist of truth with the help of study. Observation, comparison and experiment. In short also covers the systematic method of finding solution to a problem is research. It also covers the systematic approach concerning generalization and the formulation of the theory. Different stages involved in research consists of enacting the problem, formulating a hypothesis, collecting the facts or data, analyzing the facts and reaching certain conclusion either in the form of solution towards the concerned problem or in generalization for some theoretical formulation. In Research Methodology mainly Data plays an important role. The Data is divided in two parts: a) Primary Data.
  22. 22. 22 b) Secondary Data. PrimaryData – Is the data, which is collected directly by direct personal interview, interview, indirect oral investigation, Information received through local agents, drafting a schedule, drafting a questionnaire, job portals. Secondary Data - Is the data, which is collected from the various books, magazine and material, reports, etc. The data which is stored in the Organization and provide by the HR people are also secondary data. The various information is taken out regarding that subject as well other subject from various sources and stored. The last years data stored can also be secondary data. This data is kept for the internal use of the organization. The HR manual is for the internal use of the organization they are secondary data which help people to gain information. The well specified and identifiable group is known as a population, and selected number of persons or objectives is known as a sample. Population may be of two types ie; finite and infinite population.  Finite population- Is one where all the members can be easily counted .
  23. 23. 23  Infinite population – Is one whose size is unlimited and therefore its members cannot be counted.  Sampleandsampling method - Is a smaller representation of the population , it is any number of persons selected to represent the population , according to some rules or plans .ON the basis of sample sampling methods are identified which method to choose generally there are two methods of sampling ie; probability sampling method and non-probability sampling method. For the process of retaining employees in BALIC the basic tool which was used is through the tool of structured interview , in which a questionnaire was prepared by taking few dimensions which can be the cause of attrition on the basis of these dimensions. In this process , the number of causes or variables which directly or indirectly increases the rate of attrition and leads towards dump of employee’s turnover debt were sorted out on the basis of those dimensions or causes a well structured questionnaire was prepared named “ EMPLOYYEE ATTRITION RATING SCALE” , the questionnaire had its two parts ie; first part as closed – form questionnaire which was based on the dimensions sorted down , consisting of thirteen statements and second part as open- ended questionnaire which included suggestions provided by the attired employees , followed by the process of data collection by two sources ie; primary source which included
  24. 24. 24 telephonic interview of exit employees and by secondary source which included drawing information from the website of BALIC and also by talking to the existing employees of BALIC to understand the current problem across the insurance sectors . The variables which were identified to understand the causes of attrition and exit in the fiscal year (2009-2010) in BALIC were the primary, and statistical data provided by BALIC were divided into four basic areas of UP-2 region which is based on the basis of -  Division basis,  Tenure basis ,  Departmental basis,  Monthly work basis . The division basis basically includes the four regions of UP-2 ie ; Allahabad Gorakhpur ,Jaunpur and Varanasi . The departmental basis included all its sales and non-sales departments which marked attrition rate also including exits on the tenure and monthly basis . The variables identified to understand the causes of attrition are :- 1) Organizational Culture which includes in itself a) Relationship with colleagues, b) Leadership style, c) Flow of communication. 2) Job Satisfaction which includes in itself
  25. 25. 25 a) Work Motivation, b) Stress. 3) Growth and Development which includes a) Learning and development , b) Growth prospects. 4) Work –Life balance. The questionnaire was thus prepared by keeping these dimensions as basis , then followed by the process of data collection with the help of structured interview and thus data was recorded in standardized form on the basis of Likert scale ie; 5-point rating scale ranging from strongly agree to strongly disagree. The questionnaire was standardized by using Factor Analysis method. The closed-ended questionnaire was for measuring the causes of attrition and the open-ended form consisted of suggestions provided by them, which will play part of retaining employees for BALIC so that causes of leaving organization and to help reducing attrition rate and also help in retaining employees for BALIC.  ResearchProcess This project is carried out as per the above research plan. All suggestion and recommendation are based on findings of the research. As for all researches planning is very crucial so is the execution of research plan. The following topics handle the execution of this plan.  CollectionofSecondaryData:ExitAnalysis
  26. 26. 26 The main purpose of conducting structured interview is to collect data for exit analysis is to know the particular causes of attrition which will help in retaining employees in the form of suggestions given by them. Methodology- To carry out the exit analysis I had to prepare questionnaire and collect data in the Standardized form during their exit interviews. The statements were gradually recorded in Excel sheet format for the FY (2009-2010) in the form of Likert Scale ranging from 1 to 5 i.e.; ranging from strongly agree to strongly disagree and in the other part of the questionnaire the suggestions for BALIC regarding the causes of attrition was recorded in the standardized form. SAMPLING METHOD  Population- The wel identified and specified group is known as a population. It may be of two types ie;  Finite population- Is one where all the members can be easily counted. Whereas  Infinite population –
  27. 27. 27 Is one where size is unlimited and therefore its members cannot be counted. In this report population is finite in nature and population size is 452.  Sample- It is the representative of population which holds all the characteristics of population . Sample size of this research report is 117. Out of which it was divided into three parts ie  Cases of voluntary resignation - 91  Cases of involuntary absconding -22  Cases of involuntary termination -4 So our sample size is 91 as report is based on the cases of resignation only For the process of collecting data the structured interview was conducted in which all the 13 statements where asked to the exited employees and they were asked to reply on the basis of 5- point rating scale ie; LIKERT SCALE and also subjective responses were provided by them in the form of suggestions .after the process of data collection these 13 statements where arranged accordingly on the basis of dimensions. These 4 dimensions are as below-  Organizational culture- This dimension includes in it some sub-dimensions :  Relationship with colleagues including statement (10).
  28. 28. 28  Leadership styles including statements (2 , 12).  Communication including statement (13)  Job satisfaction – It also includes some sub-dimensions along with it:  Work motivation including statements (1, 5, 6, )  Stress including statements (7, 11).  Work life balance which includes statements (3, 9).  Growth & development – It also includes some sub-dimensions along with it:  Learning & development which includes statements (8).  Growth prospects which includes statements (4).
  29. 29. 29
  30. 30. 30 MEASURING SCALE Measuring scale taken for this project report is 5- point rating scale, ie; LIKERT SCALE .thus the scale constructed with the title employee’s attrition rating scale: STATEMENTS strongly agree neutral disagree strongly agree disagree 1. Were you clear about your role in your job 2. Did you had harmonious relationship with your boss. 3. Were you able to develop harmony between your personal & professional life . 4. Are there good growth prospects for you in the organization. 5. Do you think that your knowledge 7 skill was properly utilized . 6.Were you satisfied with the salary provided to you according to your job . 7. Were you demanded to work more than what was required out of your job . 8. Had you been provided enough opportunities for development through training
  31. 31. 31 programmers. 9. Did you had continuous hectic work schedule 10. Did you had harmoious relationship with your colleagues at workplace. 11. Is work pressure main reason for you to leave organization . 12. Did you had autonomy of your own self to take decisions in your organization . 13. Were you able to communicate directly to your boss regarding your professional problems.
  32. 32. 32 FINDINGS
  33. 33. 33 Analysis- India as a country is less systems-driven and more relationship-driven. Consequently every employee has high expectations from the HR department. However, due to their administration-heavy roles, HR managers are unable to meet the needs of some or several employees, andlandup displeasing many, says.- (T.C. Rao) Employee expectations have changed enormously in today‘s growing economy, making it increasingly important to attract the 'right' kind of employee. It is essential to learn the expectation of employees from organization, this achieves employee satisfaction. While conducting Exit Interviews employees were asked to express what they had expected while joining the organization.  EmployeeGrowth&Development- Opportunities for growth and development help employees expand their knowledge, skills and abilities, and apply the competencies they have gained to new situations. The opportunity to gain new skills and experiences can increase employee motivation and job satisfaction and help workers more effectively manage job stress. This can translate into positive gains for the organization by enhancing organizational effectiveness and improving work quality, as well as by helping the organization attract and retain top quality employees. By providing opportunities for growth and development, organizations can improve the quality of their employees' work experience and realize the benefits of developing workers to their full potential. THEY has to work on detailed skill / competence maps and job descriptions for all positions in the
  34. 34. 34 Company. The organization's structure and recruitment strategies are aligned to provide reasonable opportunities for career advancement, by way of promotions and horizontal growth to employees, who extract full potential of the various opportunities available within the Company. Company should provide an excellent system of well-designed tools and processes where hard work, initiative, productivity and attitudes go hand in hand with rewards and growth. These should be well integrated into the individual career goals of its employees. Developmental strategies and potential identification mechanisms should be tailored to raise an internal pool of resources, at various levels, that can be elevated to meet the organizational requirement for people with higher competencies, as against external sourcing and induction of potential.  Opportunitiesforemployeegrowthanddevelopmentinclude:  Continuing education courses  Tuition reimbursement  Career development or counseling services  Skills training provided in-house or through outside training centers  Opportunities for promotion and internal career advancement  Coaching, mentoring, and leadership development programs  CareerDevelopment: Career development is the ongoing acquisition or refinement of skills and knowledge, including job
  35. 35. 35 mastery and professional development, coupled with career planning activities. Job mastery skills are those that are necessary to successfully perform one's job. Professional development skills are the skills and knowledge that go beyond the scope of the employee's job description, although they may indirectly improve job performance. Since career development is an ongoing, dynamic process, employees may need encouragement and support in reviewing and re-assessing their goals and activities. You are in a key position to provide valuable feedback and learning activities or resources. Formal training and classes away from the job are effective in providing new information, but adult learners also need to practice new skills. Therefore, you can contribute significantly to your staff member's career development by supporting career development activities within your department.  Supportforcareerdevelopmentisimportantbecause: Current information about the organization and future trends helps employees create more realistic career development goals. Focus on skill development contributes to learning opportunities for promotion and/or lateral moves contribute to the employee's career satisfaction. A greater sense of responsibility for managing one's own career contributes to self-confidence Career planning and development clarifies the match between organizational and individual employee goals It's cost-effective to use your own staff talent to provide career development opportunities within your department Career
  36. 36. 36 development increases employee motivation and productivity Attention to career development helps you attract top staff and retain valued employees Supporting career development and growth of employees is mandated by the Philosophy of Human Resources Management  Howto SupportCareerDevelopment:  Annually, conduct an individual development plan and career discussion with employees and require other supervisors in your department to do the same.  Hold supervisors in your department accountable for supporting employee development efforts.  Create programs and activities to provide skill development, such as job rotation, cross-training, mentoring, internships, coaching, and career strategy groups.  Recognize that your role includes providing support and/or release time for staff members' development beyond their current jobs.  Support requests for flexible work arrangements from staff members.  Serve as a role model by participating in career and professional development opportunities yourself.  See staff members' applications for other positions as a healthy sign of a dynamic workplace support lateral moves within your organization.  Create job vacancy listings that allow for the most diverse applicant pool while honoring transferable skills.  Rolessupervisorscanplayinorganizations-
  37. 37. 37  Coach: Helps employees identify strengths, weaknesses, interests, and values by maintaining open, effective communication and ongoing encouragement. You can improve your coaching by:  Encouraging two-way dialogue  Showing employees how to identify their skills, interests, and values  Scheduling uninterrupted career development discussions  Advisor: Provides organizational information, realities, and resources to employees. You can improve your advising by:  Helping employees develop realistic career goals based on your department's needs and their individual development plans  Helping employees understand the current opportunities and limitations on the campus  Advising employees on the feasibility of various career options.  Appraiser: Evaluates employees' performance in an open, candid way and relates this to potential opportunities. You can improve your appraisal skills by:  Providing frequent feedback in a way that fosters development  Conducting performance appraisals that define strengths, weaknesses, and career development needs
  38. 38. 38  Relating current performance to future potential in realistic ways Using an individual development plan as a tool for continual feedback and development  Referral Agent: Helps employees meet their goals through contacts with people and resources. You can improve your referral agent skills by:  Helping employees formulate development plans and consulting on strategies.  Providing opportunities for experience, exposure, and visibility, such as committees and task forces.  Using personal resources who you know and what you know to create opportunities.  Assisting in seeking employees' placement lateral or vertical.  CompensationManagement- Considerable number of employees mention unsatisfactory compensation package as one of their reasons to quit from organizations. Organizations should hold such plans to enhance compensation system based on following:  EmployeeCompensationSystem Compensation is a systematic approach for providing monetary value to employees in
  39. 39. 39 exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. Compensation Management is an integral part of the management of the organization. Compensation Management contributes to the overall success of the organization in several ways. To be effective, the organizations must appreciate the value of competitive pay, their human resources, and have an investment view of payroll costs.  Process to Develop employee Compensation Systems  Develop a program outline.  Designate an individual to oversee designing the compensation program.  Develop a compensation philosophy.  Conduct a job analysis of all positions.  Evaluate jobs.  Determine grades.  Establish grade pricing and salary range.  Determine an appropriate salary structure.  Develop a salary administration policy.  Obtain top executives' approval of the basic salary program.  Communicate the final program to employees and managers.  Monitor the program.
  41. 41. 41  Direct Compensation- which are cash compensation items that create an employee's standard of living;  Indirect Compensation- which may be generally classed as non-cash or benefit items that protect an employee's income or contribute to the employee's standard of living; and  Differed Compensation are those rewards that are derived from working environment, which are valued internally by an individual, and cover areas such as the opportunity for personal growth, quality of work life, job satisfaction, challenge, personal and professional development opportunities, belonging, freedom to act, visionary leadership, etc.  Thefollowing3P approachcanbeadoptedbyorganization-  Paying for position  Paying for person  Paying for performance The 3P approach to compensation management supports a company's strategy, mission and objectives. It is highly proactive and fully integrated into a company's management practices and business strategy. The 3P system ensures that human resources DIRECT COMPENS ATION INDIRECT COMPENSA TION DEFFERED COMPENSA TION
  42. 42. 42 management plays a central role in management decision making and the achievement of business goals.  3P approach can be used to:  Recruit and retain qualified employees.  Increase or maintain morale/satisfaction.  Reward and encourage peak performance.  Achieve internal and external equity.  Reduce turnover and encourage company loyalty.  Modify (through negotiations) practices of unions. Recruitment and retention of qualified employees is a common goal shared by many employers. To some extent, the availability and cost of qualified applicants for open positions is determined by market factors beyond the control of the employer. While an employer may set compensation levels for new hires and advertise those salary ranges, it does so in the context of other employers seeking to hire from the same applicant pool.  Components for 3Papproach: Compensation will be perceived by employees as fair if based on systematic components. Various compensation systems have developed to determine the value of positions. These systems utilize many similar components including job descriptions, salary ranges/structures, and written procedures.
  43. 43. 43 .  The components of a compensation system include:  Job Descriptions.  Job Analysis  Job Evaluation  Pay Structures.  Salary Surveys.  Policies and Regulations.  OrganizationcanadoptPeople-CapabilityMaturityModel. One of the basic aim of this model is retain talented employees.  THE PEOPLE (CMM) : The People Capability Maturity Model (People CMM) is a roadmap for implementing workforce practices that continuously improve the capability of an organization's workforce. Since an organization cannot implement all of the best workforce practices in an afternoon, the People CMM introduces them in stages. Each progressive level of the People CMM produces a unique transformation in the organization's culture by equipping it with more powerful practices for attracting, developing, organizing, motivating, and retaining its workforce. Thus, the People CMM establishes an integrated system of workforce practices that matures through increasing alignment with the organization's business objectives, performance, and changing needs. The People CMM was first published in 1995 and has successfully guided workforce improvement programs in companies such as Boeing, Ericsson, Lockheed Martin, Novo Nordisk IT AlS, and Tata Consultancy Services. The People CMM has been designed primarily for application in knowledge-intense organizations. The People CMM's primary objective is to improve the capability of the workforce. Workforce capability can be defined as the level of knowledge, skills, and process
  44. 44. 44 abilities available for performing an organization's business activities. Workforce capability indicates an organization's readiness for performing its critical business activities, likely results from performing these business activities, and potential for benefiting from investments in process improvement or advanced technology. In order to measure and improve capability, the workforce in most organizations must be divided into its constituent workforce competencies. Each workforce competency represents a unique integration of knowledge, skills, and process abilities acquired through specialized education or work experience. Strategically, an organization wants to design its workforce to include the various workforce competencies required to perform the business activities underlying its core competencies [Prahalad 90]. Each of these workforce competencies can be characterized by its capability-the profile of knowledge, skills, and process abilities available to the organization in that domain. The philosophy implicit in the People CMM can be summarized in ten principles: 1. In mature organizations, workforce capability js directly related to business performance. 2. Workforce capability is a competitive issue and a source of strategic advantage. 3. Workforce capability must be defined in relation to the organization s strategic business objectives. 4. Knowledge-intense work shifts the focus from job elements to workforce competencies. 5. Capability can be measured and improved at multiple levels, including individuals, workgroups, workforce competencies, and the organization.
  45. 45. 45 6. An organization should invest in improving the capability of those workforce competencies that are critical to its core competency as a business. 7. Operational management is responsible for the capability of the workforce. 8. The improvement of workforce capability can be pursued as a process composed from proven practices and procedures. 9. The organization is responsible for providing improvement opportunities, and' individuals are responsible for taking advantage of them. 10. Because technologies and organizational forms evolve rapidly, organizations must continually evolve their workforce practices and develop new workforce competencies.  Overview ofthe PeopleCMM  Organizational Maturity- The People CMM is an organizational change model. It is designed on the premise that improved workforce practices will not survive unless an organization's behavior changes to support them. The People CMM provides a roadmap for transforming an organization by steadily improving its workforce practices. As do all Capability Maturity Models, the People CMM consists of five maturity levels, or evolutionary stages, through which an organization's workforce practices and processes evolve. At each maturity level, a new system of practices is added to those, implemented at earlier levels. Each overlay of practices raises the
  46. 46. 46 level of sophistication through which the organization develops its workforce. Within this environment individuals experience greater opportunity to develop their career potential and are more motivated to align their performance with the objectives of the organization. From the perspective of the People CMM, an organization's maturity is derived from the workforce practices routinely performed inside it, and the extent to which these practices have been integrated into an institutionalized process for improving workforce capability. In a mature organization, responsible individuals perform repeatable workforce practices as ordinary and expected requirements of their positions. The more mature an organization, the greater its capability for attracting, developing, and retaining the talent it needs to execute its business.  MaturityLevels- A maturity level represents a new level of organizational capability created by the transformation of one or more domains of an organization s processes The People CMM stages the implementation of increasingly sophisticated workforce practices through these maturity levels. With the exception of the Initial Level each maturity level is characterized by a set of interrelated practices in critical areas of workforce management. When institutionalized and performed with appropriate regularity, these workforce practices create new capabilities within the organization for managing and developing its workforce. The Five MaturityLevel Of P-CMM
  47. 47. 47 The P-CMM consists of five maturity levels that lay successive foundations for continuously improving talent, developing effective teams, and successfully managing the people assets of the organization. Each maturity level is a well-defined evolutionary plateau that institutionalizes a level of capability for developing the talent within the organization. Each maturity level is a well-defined evolutionary plateau that institutionalizes a level of capability for developing the talent within the organization.  TheKeyProcessAreasforLevel2:Repeatable The key process areas at Level 2 focus on instilling basic discipline into workforce activities. They are work
  48. 48. 48 environment, communication, staffing, performance management, training, and compensation.  The goals of Work Environment are: 1. An environment that supports the performance of business processes is established and maintained. 2. The resources needed by the workforce to perform their assignments are made available. 3. Distractions in the work environment are minimized.  The goals of Communication are: 1. A social environment that supports task performance and coordination among individuals and groups is established and maintained. 2. Information is shared across levels of the organization. 3. Individuals develop skills to share information and coordinate their activities. 4. Individuals are able to raise grievances and have them addressed by management.  The goals of Staffing are: 1. The organization actively recruits for qualified talent. 2. The most qualified candidate is selected for each position. 3. Selected candidates are transitioned into their new positions. 4. Members of a unit are involved in its staffing activities.  The goals of Performance Management are: 1. Job performance is measured against objective criteria and documented. 2. Job performance is regularly discussed to identify actions that can improve it.
  49. 49. 49 3. Development opportunities are discussed with each individual. 4. Performance problems are managed. 5. Outstanding performance is recognized.  The goals of Training are: 1. Training in the critical skills required in each unit is provided. 2. Individuals receive timely training that is needed to perform their assignments. 3. Training opportunities are made available to all individuals.  The goals of Compensation are: 1. Compensation strategies and activities are planned, executed, and communicated. 2. Compensation is equitable relative to skill qualifications and performance. 3. Adjustments in compensation are made periodically based on defined criteria.  TheKeyProcessAreasforLevel3:Defined The key process areas at Level 3 address issues surrounding the identification of the organization's primary competencies and aligning its people management activities with them. They are knowledge and skills analysis, workforce planning, competency development, career development, competency-based practices, and participatory culture.  The goals of Knowledgeand Skills Analysis are:
  50. 50. 50 1. The core competencies required to perform the organization's business processes are known. 2. Knowledge and skills profiles exist for each business process. 3. Knowledge and skills profiles are updated for anticipated future needs.  The goals of Workforce planning are: 1. The organization develops a strategic plan for long-term development of the competencies and workforce needed for its business operations. 2. Near-term workforce and competency development activities are planned to satisfy both current and strategic workforce needs. 3. The organization develops talent for each of its key positions. 4. The organization tracks performance in achieving its strategic and near- term workforce development objectives.  The goals of Competency Development are: 1. The organization knows its current capability in each of the core competencies required to perform its business processes. 2. The organization develops capabilities in its core competencies. 3. Individuals develop their knowledge and skills in the organization' core competencies.  The goals of Career Development are: 1. Career development activities are conducted with each individual. 2. The organization offers career opportunities that provide growth in its core competencies. 3. Individuals are motivated to pursue career goals that optimize the value of their knowledge and skills to the organization.
  51. 51. 51  The goals of Competency-Based Practices are: 1. Workforce practices are tailored to motivate individuals and groups to improve their knowledge and skills in the core competencies of the organization. 2. Workforce activities are adjusted to support development in the core competencies of the organization. 3. Compensation and reward strategies are tailored to motivate growth in the core competencies of the organization.  The goals of Participatory Cultureare: 1. Communication activities are enhanced to improve the flow of information within the organization. 2. Decisions are made at the lowest appropriate level of the organization. 3. Individuals and groups participate in decision-making processes that involve their work or commitments.  TheKeyProcessAreasforLevel4:Managed The key process areas at Level 4 focus on quantitatively managing organizational growth in people management capabilities and in establishing competency-based teams. They are mentoring, team building, team-based practices, organizational competency management, and organizational performance alignment.  The goals of Mentoring are: 1. Mentoring activities are matched to defined objectives. 2. Mentors are selected and prepared for their responsibilities.
  52. 52. 52 3. Mentors are made available for guidance and support to other individuals or groups.  The goals of Team Buildingare: 1. Teams are formed to improve the performance of interdependent tasks. 2. Team assignments are made to integrate complementary knowledge and skills. 3. Team members develop their team skills. 4. Team members participate in decisions regarding their work. 5. The organization provides standard processes for tailoring and use by teams in performing their work.  The goals of Team-Based Practices are: 1. The organization adjusts its workforce practices and activities to motivate and support the development of team-based competencies within the organization. 2. Workforce activities are tailored to support the needs of different types of teams within the organization. 3. Team performance criteria are defined and measured. 4. Compensation and reward systems are tailored to motivate improved team performance.  The goals of Organizational Competency Management are: 1. Measurable goals for capability in each of the organization's core competencies are defined. 2. Progress toward achieving capability goals in the organization's core competencies is quantified and managed.
  53. 53. 53 3. The knowledge and skills-building capability of the organization's competency development activities is known quantitatively for each of its core competencies.  The goals of Organizational Performance Alignment are: 1. Measurable goals for aligning individual, team, unit, and organizational performance are defined. 2. Progress toward achieving performance alignment goals is quantified and managed. 3. The capability of workforce activities to align individual, team, unit, and organizational performance is known quantitatively. The key process areas at Level 5 cover the issues that address continuous improvement of methods for developing competency, at both the organizational and the individual level. They are personal competency development, coaching, and continuous workforce innovation.  TheKeyProcessAreasforLevel5:Optimizing  The goals of Personal Competency Development are: 1. Individuals know their capability in each of the competencies involved in their work. 2. Individuals continuously improve their knowledge and skills in the competencies involved in their work. 3. Participation in improving personal competencies is organization wide.  The goals of Coaching are:
  54. 54. 54 1. Coaches are selected for their expertise and prepared for their responsibilities. 2. Coaches work with individuals to improve their personal competency and performance. 3. Coaches work with teams to improve their team-based competencies and performance.  The goals of ContinuousWorkforce Innovation are: 1. Innovative workforce practices and technologies are evaluated to determine their effect on improving core competencies and performance. 2. The organization s workforce practices and activities are improved continuously. 3. Participation in improving the organization’s workforce practices and activities is organization-wide. Employee RetentionTechniques According To Suggestions Provided ByExit Employees Of BALIC. There are some suggestions provided by the exit employees of BALIC provided on the basis of the questionnaire . which had 4 basic dimensions on which they replied , which is provided as below- I. Organizational culture -
  55. 55. 55 In the organizational culture employees showed dissatisfaction in the areas mentioned below and employees can be retained by providing improvement in these particular areas – Managerial skills-  Provide training to enhance managerial skills.  Provide proper time to ASMs to complete tasks.  Stop misguiding sells person’s for selling of plans.  Managers should be provided management skills through training, they should not be promoted to the post of managers only on basis of experience.  Managementstyle-  Checks should be issued directly to SMs and not should not go in the hands of Branch Managers .  BALIC needs more advertisement in rural areas .  Make transparency in roles/ policies.  Policies and plans-  Remove top up policies.  Policies need more promotion especially in rural areas.  Remove the concept of LG.  Miss selling of plans by some employees must be stopped.  Give one month time to prepare ICs.
  56. 56. 56 ii. Work Life Balance- Work - life balance is area which is most important in human beings life, a balance should be created in such a form as such neither personal and nor professional life hinder in the development and in living of the human being’s life. as provided by exit employees areas where BALIC need to do improvement –  Bring improvement in recruitment policies of BALIC.  Working hours should be specified and after once its over no work pressure should be pushed by superiors.  Recruit right person for right job. ii. Job Satisfaction- If the individual is not satisfied with the job provided to him so he cannot satisfy either himself or his organization so job satisfaction is area where improvement is required.  Reduce targets of I single individuals.  Provide freedom of working style .  Wrong commitments should not be given to either employees or to the customers.  Update the environment of office with all the equipments and tools present.
  57. 57. 57  Growth anddevelopment- Growth and development keeps individual attached to the organization good growth prospects means good performance of individuals.  Enhance growth prospects especially for Statistic Initiatives and for all agencies.  Provide proper training including in itself some practical implements.
  58. 58. 58 LIMITATIONS:  Standard theory and concepts regarding this topic are not easily available.  Insurance sectors are very sensitive towards disclosing retention policies/practices applied in their company.  Time involved in collecting primary data was considerably high. Even though respondents were not asked to give any personal details.
  59. 59. 59 CONCLUSIONS- One of the biggest assets of the organization is manpower. This industry is competing life and non-life insurance So, the biggest challenge in this industry is to attract and retain knowledgeable manpower. Insurance sectors are facing a shortage of knowledge workers because the rate at which they lose employees is almost double the rate at which they hire. In such a scenario where companies are fighting to combat global business competition, and struggling to survive, employee turnover comes as a double blow. BALIC approach towards employee retention is quite unique and very well described. It has been a constant endeavor on the part of the company to retain talented manpower by providing good growth opportunities and high compensation package. And this is what employees expect from organization. As companies have significantly improved their bottom lines riding on economic growth wave, high frequent hikes in salary would not be much of a concern. In today’ s knowledge economy, managing Human Resource has been the most difficult task. Under taking a project in BALIC I have learnt causes of attrition and retention strategies that otherwise could not be understood in books, cause human needs change and so the retention strategies. There is no prescribed solution to retain good employees, but pressing need for
  60. 60. 60 companies to plan a retention program remains. This program must identify good performers who are likely to leave the company and proactively work to retain them. The program is to be so designed to that it blends the employees with organisation goal and objective.
  61. 61. 61 REFERENCES * Books-  “Human Resources in a Globally Competitive Business Environment”, Wayne F. Cascio, Managing Human Resource, Tata Mc Craw Hill Edition, pp: 26-29.  Tests ,measurement and research methods in Behavioral sciences, A.K.SINGH, 5th edition , Bharti Bhawan.  Fundamentals of Human Resource Management , Decenzo D.A. & Robbins Stephen P. , eighth edition, Wiley India 2009.  Organizational Behavior , Lthans Fred , 11th edition , McGRAW HILL International Edition .  Training Instruments in HRD and OD, Pareek Udai,  Communication in Organization , Fisher D. 2nd Edition ,JAICO Publishing house, 2007. * Websites-  www.google.com
  62. 62. 62  www.wikkepedia.com  www.balic.co.in  www.bajajauto.com  www.bajajallianzlife.co.in